The Tasmanian government is defending a controversial plan to to reverse a moratorium on logging old growth forests, despite the forestry industry warning it risks damaging the Tasmanian brand and undermining attempts at sustainable forestry certification.

Labor MPs went straight from that debate to a leadership spill, capping off a tumultuous week in Tasmanian politics.

The new forestry legislation was proposed in October, after state-owned logging company Forestry Tasmania said it was unable to meet its guaranteed quota of 137,000 cubic metres of timber a year from the existing forestry estate without incurring significant costs.

Moratorium on logging Tasmania's old growth forests could be reversed

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It proposes reversing the moratorium on logging 356,000 hectares of future potential production forests, which under the 2013 forestry peace deal were protected from logging until 2020, when they would be included in forest reserves.

If the legislation successfully passes the upper house, which is currently split in its support, those forests will be available for logging from 1 July 2018.

Resources minister Guy Barnett said that would save existing jobs and create opportunities for new jobs in the forestry industry.

But the Forest Industry Association of Tasmania said in a statement this week it was unable to support the legislation, which chief executive Terry Edwards said would “create unnecessary sovereign risk in log supply and problems in our markets and a return to the forestry wars.”

Edwards said only 64,000 hectares of the 356,000 hectares of future potential production forest zone was viable production forest, and said that could be made available for logging in exchange for protecting an area of existing production forest, under mechanisms of existing forestry legislation.

“Why are we having a fight over making future potential production forest into a production forest now when we can’t harvest it?” he told Guardian Australia.

Edwards also disputed the need for the additional timber, saying that Forestry Tasmania’s claim that up to 25% of the existing forestry debate could not be economically logged was based on a “quick snapshot analysis” which had not been tested.

He accused the government of trying to re-start the long-running forestry conflict, which he said would undermine ongoing attempts to get Forest Stewardship Council certification.

War and peace – and war again? The battle for Tasmania’s ancient forests

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The Wilderness Society’s Vica Bayley said it was extraordinary for the government to push for extra logging areas if even the peak industry body was opposed.

“In whose interest could they be advocating to pass it?” Bayley asked. “It’s clearly not in the forest industry’s interest, it’s clearly not in the community’s interest, and it’s clearly not in the interests of the forest itself.”

Both Edwards and Bayley were involved the lengthy forest peace deal negotiation process, which was designed to end conflict between loggers and environmental groups in Tasmania by creating an agreed network of reserves and expanding the world heritage estate.

The Hodgman government was elected in 2014 on the back of a promise to destroy the deal, which had only been cemented in legislation the year before. On Friday, premier Will Hodgman said this latest piece of legislation was part of delivering that election promise.

“This is delivering on our plan that we took to the people, and an election commitment we are delivering that will further ensure growth in the forest industry,” he said.

Outgoing opposition leader Bryan Green, who handed in his resignation to the Tasmanian governor on Friday less than nine hours after announcing his retirement to the parliamentary Labor party, cited “holding the government to account” over the forestry bill one of the successes of his last week of politics.

Green, who had been in the Tasmanian parliament for 19 years and survived two plane crashes, two corruption trials, one car crash, and saved a rare dolphin in that time, resigned to hand the reins over to Rebecca White.

White, 34, is the youngest ever parliamentary leader in Tasmania and was elected unopposed after being nominated for the leadership by Green.

She returned from maternity leave last month and fielded the inevitable questions about juggling work and motherhood at a press conference on Friday, saying: “I feel very strongly that I have an obligation to be the best role model that I can for my daughter. I shouldn’t let the fact that I’ve got a young family prevent me from pursuing the ambitions that I have for myself, and the party, and the state.”